My first private money deal, however, was quite a different story.

After beating the streets and pounding the pavement for what seemed like a long time, I had finally gotten a private investor interested in sitting down with me that was ready to write a check. Boy, was I nervous. That day I felt like I had felt in the past at job interviews. Palms sweaty. Flushed face. Nervous energy.

I was proposing a simple private mortgage loan, it was just like this:

Single family house, 3 bed, 1 bath, basement, garage. Purchase price was $100,000. It was a lease-option, rent to own property and I needed the money to purchase and renovate. The entire deal was pretty straight-forward and the lender was interested, but I still had a big cavern to cross over in my mind.

You see, up until this point, I hadn’t had much success with private investors. There were no reliable resources for me to find out how to find investors and propose deals, let alone how to structure the private money loan or equity investment. I was feeling my way in the dark and learning as I went. There was a lot of sand kicked in my face. I felt like I was burping up sand castles for a while.

Sitting down with this investor, all the pieces seemed to come together. I had done everything right up to this point, but I was still very nervous.

I entered the restaurant, one of those chain/theme places with all the regalia on the walls. It was a mid-summer afternoon, and I might as well have been in the middle of the desert. My throat was dry and parched and I was sweating. Deep down, I knew I just had to let my business experience and belief in myself do the talking.

As I shook hands with the investor and began the conversation, I was almost afraid to get down to brass tacks. I kept everything in small talk mode for a while, perhaps too long. Soon the investor asked me if we could get down to business. I fumbled through some papers that I had brought and finally found the deal sheet I was presenting.

At first, the investor was looking very skeptical, not engaged or asking many questions. My heart began to sink. I kept talking, trying to pull the investor into the conversation. There was some back and forth, but not much.

After I was done pitching the deal, there was an awkward silence. Then, a few questions came:

“How does it work when the house sells?

“When do the payments come?”

“What happens if the tenant moves out?”

I happily answered each of these questions as best I could. They were pretty simple to answer, but you can never take anything for granted with a private money investor. After I finished answering the investor’s questions, there was another awkward silence. “Well, this is it,” I though to myself. Sitting there in that brief moment of silence,  for some reason I remembered a line from Wall Street, one of my favorite movies.

If you’ve seen the movie, you’ll remember the scene where Bud Fox (played by Charlie Sheen) is an up and coming businessman and he goes to see a big shot he wants to do business with. The big shot is Gordon Gekko (played by Michael Douglas) and Bud has been trying to get to see and propose a deal to Gekko for months on end. He finally gets his way into the door and then Gekko’s secretary tells Bud Fox that he has only 5 minutes to say his peace in front of Gordon Gekko. Bud Fox then stands up, straightens his tie and says: “Well, life all comes down to a few moments…this is one of them.”

That very line, “life all comes down to a few moments…this is one of them,” rang in my head as I sat there across from my first private investor. What I did next just flowed naturally: I asked them if they would like to invest in the deal as a private mortgage lender. I just asked them straight up and then I shut my mouth and waited for an answer. And waited…and waited…

It seemed to take forever. Time stood still. I swear, the arctic glaciers moved a few feet in the time that it took my investor to give me an answer. But, it was an answer worth waiting for.

After what seemed like an eternity, the investor cleared their throat and said: “Ok, I’d like to invest in this deal. When do you need the money?”

I felt like jumping on top of the table and doing a dance. I was elated and probably had an ear to ear smile. For the moment, though, I kept my composure and calmly moved into the rest of the details. I gave them some information to take along, as well as a closing date & time to have the funds available and we each went back to our workday.

Wow! What a feeling of elation. I had, for the first time, successfully had another person invest their hard earned savings into a real estate deal with me. I didn’t have to go and beg a banker or arm-wrestle a mortgage broker or plead with a hard money lender to fund the deal. It was all taken care of in one fell swoop in a matter of 1 hour with a private investor.

For a while, I just sat there in my car. Thankful that everything went well, I stared off into the distance for a few minutes, just reflecting on the day and the events and steps that had led to it. Slowly, I snapped back to reality, started my car, put it in drive and began my drive back to the office.

As I drove home, I looked out at the road ahead and knew that my real estate investing business would be forever changed – for the better. Yes, indeed. The road ahead was going to be much smoother now that I was working with private money.

After that deal and countless others since, I can honestly say that having private money has been the single biggest difference maker in my real estate investing business. Having private investors has allowed me to flip houses in one of the toughest real estate markets in the entire country, and get in on multi-million dollar deals that I would not have had access to if I was only using my own money or credit or using banks or mortgage companies.

Once you work with private money in your real estate business, I’m sure you’ll feel the same way I do.

To Your Success,